The UK government is ahead of the curve in cloud, but work still needs doing

Thanks to G-Cloud, the once stagnant public sector IT marketplace that was dominated by a small number of large incumbent providers, is thriving. More and more SMEs are listing their assured cloud services on the framework, which is driving further competition and forcing down costs for public sector organisations, ultimately benefitting each and every UK tax payer.  But the programme still needs work.

G-Cloud initially aimed to achieve annual savings of more than £120m and to account for at least half of all new central Government spend by this year. The Government Digital Service has already estimated that G-Cloud is yielding efficiencies of at least 50 per cent, comfortably exceeding the initial target set when the Government’s Cloud Strategy was published in 2011.

According to the latest figures, the total reported G-Cloud sales to date have now exceeded £591m, with 49 per cent of total sales by value and 58 per cent by volume, having been awarded to SMEs. 76 per cent of total sales by value were through central Government; 24 per cent through the wider public sector, so while significant progress has been made, more work is clearly needed to educate local Government organisations on the benefits of G-Cloud and assured cloud services.

To provide an example of the significant savings achieved by a public sector organisation following a move to the cloud, the DVLA’s ‘View driving record’ platform, hosted on GOV.UK, secured online access to driving records for up to 40 million drivers for the insurance industry, which it is hoped will help to reduce premiums. Due to innovative approaches including cloud hosting, the DVLA managed to save 66 per cent against the original cost estimate.

Contracts held within the wider public sector with an estimated total value of over £6bn are coming to an end.  Therefore continued focus must be placed on disaggregating large contracts to ensure that all digital and ICT requirements that can be based on the cloud are based on the cloud, and sourced from the transparent and vendor-diverse Government Digital Marketplace.

Suppliers, especially SMEs and new players who don’t have extensive networks within the sector, also need much better visibility of downstream opportunities. Currently, G-Cloud is less transparent than conventional procurements in this respect, where pre-tender market engagements and prior information notices are now commonplace and expected.

However, where spend controls cannot be applied, outreach and education must accelerate, and G-Cloud terms and conditions must also meet the needs of the wider public sector. The G-Cloud two year contract term is often cited as a reason for not procuring services through the framework, as is the perceived inability for buyers to incorporate local, but mandatory terms and conditions.

The Public Contracts Regulations 2015 introduced a number of changes to EU procurement regulations, and implemented the Lord Young reforms, which aim to make public procurements more accessible and less onerous for SMEs. These regulations provide new opportunities for further contractual innovation, including (but not limited to) dynamic purchasing systems, clarification of what a material contract change means in practice, and giving buyers the ability to take supplier performance into account when awarding a contract.

The G-Cloud Framework terms and conditions must evolve to meet the needs of the market as a whole, introducing more flexibility to accommodate complex legacy and future requirements, and optimising the opportunities afforded by the new public contract regulations. The introduction of the Experian score as the sole means of determining a supplier’s financial health in the G-Cloud 6 Framework is very SME unfriendly, and does not align to the Crown Commercial Service’s own policy on evaluation of financial stability. The current drafting needs to be revisited for G-Cloud 7.

As all parts of the public sector are expected to be subject to ongoing fiscal pressure, and because digitising public services will continue to be a focus for the new Conservative Government, the wider public sector uptake of G-Cloud services must continue to be a priority. Looking to the future of G-Cloud, the Government will need to put more focus on educating buyers on G-Cloud procurement, the very real opportunities that G-Cloud can bring, underlined by the many success stories to date, and ensuring the framework terms and conditions are sufficiently flexible to support the needs of the entire buying community. G-Cloud demonstrates the possibilities when Government is prepared to be radical and innovative and in order to build on the significant progress that has been made, we hope that G-Cloud will be made a priority over the next five years.

Written by Nicky Stewart, commercial director at Skyscape Cloud Services